New European currency should simplify travel Euro: Beginning Jan. 1, 2002, 11 countries will make coins and bills available


August 16, 1998|By Edmund L. Andrews | Edmund L. Andrews,NEW YORK TIMES NEWS SERVICE

Here is a pop quiz for bargain-hunters traveling in Europe. A pair of leather loafers from J.P. Tod's costs about 308,000 lire in Rome, 26,500 pesetas in Madrid and 400 marks in Frankfurt.

Where are the shoes cheapest?

The answer requires a calculator, a list of exchange rates and a lot of tenacity. But there is a big difference: At $176 in Rome, the shoes are about $50 cheaper than in Frankfurt.

And that difference marks just one illustration of how the launch of a single European currency, the euro, should eventually have a big impact on travelers.

In a historic agreement earlier this year, leaders from 11 European nations led by France and Germany agreed to launch the euro as a common currency next Jan. 1 and to abandon the cacophony of marks, francs, guilders and pesetas in 2002.

For travelers, the most tangible changes will not take place until the new bills and coins enter circulation three years from the debut of the currency, and the old ones cease to be valid. Until then, the euro will exist only in electronic transactions. Many companies are not planning to even post prices in euros for at least another year.

Nevertheless, the euro's impact could become significant well before the new bills and coins arrive. Euros will be usable in credit card and bank transactions from day one. Many hotels, airlines and train companies plan to post prices and accept payments in euros as well as local currencies almost immediately. Stores, restaurants and places of entertainment are expected to convert their systems more gradually.

Over time, travel experts say, there is likely to be a significant impact on prices. That could particularly effect tour packages that combine airfare and lodging, where international competition is already intense.

"I am sure that travel as a whole will become cheaper, particularly with regard to holiday packages," said Gerd Hesselmann, president of the German Association of Travel Agencies, based in Frankfurt. "Travel agencies that offer packages will have lower cost and more competition, due to the euro, and that will make their products cheaper."

Many big hotel companies are planning a rapid adoption of euro-based prices. Bass Hotels and Resorts, which operates 237 hotels around Europe, including those under the Intercontinental and Holiday Inn names, expects to start quoting prices in euros by next June.

"For us, this is being driven by consumers and by corporate clients," said Luce Boogmans, a spokesman for Bass. He predicted that international travelers will increasingly prefer to pay their bills in euros instead of local currencies, particularly as big corporations convert their own accounting systems to the euro.

For travelers, the most concrete changes will come with the debut of the coins and bills on Jan. 1, 2002. The old currencies will cease to be valid July 1, 2002.

At the moment, the countries that have pledged to adopt the euro are Germany, France, Italy, Belgium, the Netherlands, Luxembourg, Spain, Portugal, Ireland, Austria and Finland.

Pub Date: 8/16/98

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